Browsing by Subject "FSC certification"

Abstract The demand for land and wood products is increasing at alarming rate in Sub-Saharan Africa. The sustainable forest plantations are becoming a solution to meet the demand and reduce the pressure of natural forest logging. The Forest Stewardship Council certification ensure the sustainability of the forest companies. The certification is unpopular in Sub-Saharan Africa. The lack of information of costs and benefits, discourage the implementation of the certification. The aim of this thesis is to increase the understanding of the financial basis of FSC certification for forest plantation company in Sub-Saharan Africa. The literature review and interview with the companies revealed the cost and benefit components of the certification. The data questionnaire was performed to have actual values from the companies. The data questionnaire includes pre-certification costs, annual certification period costs and benefits. I managed to have information of three plantation from two companies, the Miro Ghana and Sierra Leone and New Forest Company Tanzania plantations. The analysis is based on cost and benefit analysis principles. The equation counts pre-certification costs, and discounts annual certification period costs and benefits to present time. The timeline for this study is 30 years. The results show that the FSC certification benefits outweighs the costs in two cases out of three. The net-present value of the certification is 393US$/Ha for Miro Ghana, 555US$/Ha for Miro Sierra Leone and -1053US$/Ha for New Forest Company Tanzania. The most important components are the price premium, annual labor costs and annual infrastructure maintenance cost. The forest plantation companies should certify their operation, if they are able to enter markets where price premium occurs. The future research should include the costs and benefits of certification to society and environment, to have information of social costs and benefits.